Household saving is defined as the difference between a household’s disposable income (wages, income of the self-employed and net property income) and its consumption (expenditures on goods and services.)

World’s Safest Banks 2016: Country Winners

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Global Finance’s country-by-country ranking of the Safest Banks comprises 104 countries. Sixteen of these countries have a new safest bank this year. Most new winners have earned their places through ratings upgrades, while some have taken the top position by holding on to relatively high ratings while their peers were downgraded. For example, Banco Agromercantil in Guatemala was upgraded by Fitch in January 2016, ING Bank Śląski was upgraded by Fitch in April, and PrivatBank of the Ukraine was upgraded by all three agencies.

Bank Islam Brunei Darussalam received its first rating from S&P in October 2015 and eclipsed last year’s winner, Baiduri Bank. Development Bank of Mongolia was upgraded by Moody’s, and BDO Unibank of the Philippines was upgraded by Fitch.

In contrast, HSBC Oman replaces Bank Muscat because it was able to retain relatively high ratings despite a downgrade of the Omani government and consequent lowering of most bank ratings in the country. The wide-ranging downgrades of Brazilian banks enabled Itaú Unibanco to rise to the top—the bank has the same ratings as some other Brazilian banks but greater asset size.

The methodology used to identify the safest bank in each individual country is different from that used to calculate our Global, Emerging Markets and Commercial Safest 50 lists. To be eligible for inclusion in the individual country rankings, banks need to be among the biggest 1000 in the world, ranked by assets, rather than the biggest 500. Furthermore, banks with only one rating are eligible.

When a bank has only one rating, an implied second rating is calculated by deducting one point from the score given by the first rating; an implied third rating is calculated by deducing one point from the score of the second rating. If banks have the same score, the Safest Bank title is awarded to the bank with the greatest assets, reflecting the strong positive correlation between asset size and high ratings. This part of the methodology is the same as that used in our other rankings.

This year’s listing includes Bangladesh, as Moody’s assigned a first-time rating to Eastern Bank in March 2016. But unlike in previous years, it does not include Albania, after Moody’s withdrew its rating on Credins Bank, leaving no Albanian bank rated by any of the Big Three agencies.

In many countries, the safest bank has a rating deep in sub-investment-grade territory. For example, Ardshinbank in Armenia and Ipoteka Bank in Uzbekistan have ratings in the single B range; Habib Bank of Pakistan has a Caa1 rating from Moody’s, and National Bank of Greece has ratings in the Caa range from Moody’s and S&P.

Six of the seven safest banks in sub-Saharan Africa have aggregate sub-investment-grade ratings (the exception is South Africa); as do 11 of the 19 safest banks in Latin America and 10 of the 18 in Central and Eastern Europe and the former Soviet Union.

In contrast, only two Western European Safest Banks have aggregate sub-investment-grade ratings (National Bank of Greece, and RCB Bank in Cyprus).